A federal appeals court has heard an appeal of a decision earlier this year to halt a controversial 10% reimbursement cut in Medi-Cal, California's Medicaid program.

Medi-Cal, California's Medicaid program, reimbursement cut, U.S. 9th Circuit Court of Appeals, Judge Christina Snyder, reimbursement reduction, California Pharmacists Association, CPhA, Jon Roth, National Association of Chain Drug Stores, NACDS, Steve Anderson, California Medical Association, James Hay, CMA, Medi-Cal reimbursement cuts

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Appeal of block on Medi-Cal cut is heard

October 11th, 2012

SACRAMENTO, Calif. – A federal appeals court has heard an appeal of a decision earlier this year to halt a controversial 10% reimbursement cut in Medi-Cal, California's Medicaid program.

The U.S. 9th Circuit Court of Appeals on Wednesday heard the state of California's appeal of a ruling in late March by Judge Christina Snyder to uphold an injunction blocking the implementation of a reimbursement reduction for Medi-Cal.

A decision on the hearing is expected later this year or in early 2013.

In spring of 2011, the California Legislature passed and Gov. Jerry Brown signed AB 97, which included a 10% reimbursement rate cut for doctors, dentists, pharmacists and other Medi-Cal health care providers. Federal approval was required before the state could implement its proposed cuts.

A coalition of health care-related groups has worked to prevent the reduction, saying the cut would be devastating to many health providers and limit access to care. They include the California Pharmacists Association (CPhA), National Association of Chain Drug Stores (NACDS), California Medical Association (CMA), the California Dental Association (CDA), California Association of Medical Product Suppliers (CAMPS), AIDS Healthcare Foundation (AIDS) and American Medical Response (AMR).

"We urge the court to rule in favor of preserving patient access to pharmacy care," NACDS president and chief executive officer Steve Anderson said in a statement. "Many patients rely on services provided by community pharmacy, such as flu shots, medication counseling and health screenings. If implemented, the Medi-Cal cuts could compromise patient health and access to some of these pharmacy services, which would also drive up health care costs. Compromised care is not something patients should have to face when it comes to their health."

The plaintiffs in the case, CMA et al. v. Douglas et al., stand by previous arguments that cutting payments in the Medi-Cal system will hugely impact access to care for patients who need it most.

Because Medi-Cal rates are already extremely low and many prescription medications are reimbursed at break-even rates, many providers can't afford to participate, the health groups claim, noting that Kaiser State Health Facts lists California as the lowest-reimbursed state in the nation.

"We expect the appeal to be met with the same verdict Judge Snyder handed down in January, which is to block the Medi-Cal reimbursement cuts," stated Jon Roth, CPhA's chief executive. "It's very clear that if the state moves forward with Medi-Cal payment cuts, access to care for patients is sure to worsen.

"Many pharmacists throughout the state will have no choice but to turn away new Medi-Cal patients or be forced to stop accepting Medi-Cal all together, which will end up sending California's poorest, most vulnerable citizens to the hospital or emergency room for care," Roth explained. "In the end, California will lose far more many than the projected savings from the cuts.”

The lawsuit was filed against the California Department of Health Care Services and the U.S. Department of Health and Human Services on Nov. 21, 2011.

"In January of this year, a federal court issued the decision to block California state officials from moving forward with a 10% cut to Medi-Cal payments," stated James Hay, CMA president. "Judge Snyder's ruling clearly indicated that California's fiscal crisis does not outweigh the serious irreparable injury plaintiffs would suffer absent the issuance of an injunction."

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